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Taxed into Long-Term Care

A costly expansion of ObamaCare is in sight.

If Barack Obama is reelected, an extremely expensive expansion of ObamaCare may well be heaped upon Americans.

Because the Supreme Court decision on the Affordable Care Act now lets the federal government tax us for not doing what it demands of us, the administration can institute a long-term insurance program, which Americans will have to pay for whether or not they want it or can afford it.

Involved is reincarnation of a section of the original Obamacare bill. It was called Community Living Assistance Services and Supports Act (CLASS). When ObamaCare was first drafted, the CLASS Act was slipped into it. It was a Ted Kennedy favorite. It would raise $70 billion to help keep the total cost of the health care overhaul down to Obama’s promised level—below a billion dollars.

Long-term care is provided by nursing homes, assisted-care facilities and in-home health aides for the elderly and the disabled. But most people don’t buy long-term care because it’s so expensive. Some hope they won’t need it or their families will care for them. The poor get nursing home care through Medicaid, a sub-standard assistance. But the backers of Obamacare thought long-term care should be included for everyone.

CLASS provided for Americans to voluntarily pay premiums of as much as $3,000 a month to receive future long-term care costs in a nursing home or through an in-home health plan. That amount would nowhere near pay for home health care in a long-term care facility or in-home health care these days.

Last October, the Obama administration health wizards shook themselves into reality and decided it would have to pull the plug on CLASS. It finally admitted this entitlement program was unsustainable as a voluntary plan. Estimates made at the time the bill was written were never reliable.

HHS Secretary Kathleen Sebelius told Congress: "For 19 months, experts inside and outside of government have examined how HHS might implement a financially sustainable, voluntary and self-financed long-term care insurance program under the law that meets the needs of those seeking protection for the near term and those planning for the future. The work has been groundbreaking in many ways and has taught us a great deal. … But despite our best analytical efforts, I do not see a viable path forward for CLASS implementation at this time." Sebelius also wrote that the challenge the CLASS Act was created to address is not going away.

"By 2020," she wrote emotionally, "we know that an estimated 15 million Americans will need some kind of long-term care and fewer than 3% have a long-term care policy.... These Americans are our family, our friends and our neighbors. If they are to live productive and independent lives, we need to make sure that they have access to the long-term care supports that make that possible.

"The CLASS program seeks to address the critical need that Americans have for affordable long-term care service,” Sebelius continued. “The current market does not offer viable options for those unable to access private long-term care insurance. We look forward to working with … Congress, consumer advocates, healthcare providers, insurers and other stakeholders to find solutions that ensure all Americans have the choices that best meet their needs."

Democrats knew from the beginning that CLASS would have to pay out more in benefits than it collected in premiums. Medicare Actuary Richard Foster warned in 2009 that the program would have to enroll more than 230 million people—more people than in the entire American workforce to come even close to working.

Backers of CLASS knew the program wasn’t fiscally sound well before the Obamacare law passed in 2010, according to the Associated Press, which wrote:

“Even as leading Democrats offered assurances to the contrary, government experts repeatedly warned that a new long-term care insurance plan could go belly up, saddling taxpayers with another under-funded benefit program, according to emails disclosed by congressional investigators.”

At that time, HHS Secretary Kathleen Sebelius said she was committed to fixing the program, maybe by forcing individuals to enroll with a separate mandate. In fact, Secretary Sebelius declined to rule out that possibility. When the law was being written, Senator Judd Gregg (R-NH) had the sense to insist on giving the Secretary of HHS the discretion to modify the program if it appeared to be unworkable.

So, it was last October when Sebelius finally notified Congress that the CLASS Act, being voluntary, was unsustainable and unable to be implemented. In a letter to Congress, she wrote, “Despite our best analytical efforts (which have characteristically been flawed), I do not see a viable path forward for CLASS implementation at this time.”

But now, HHS unexpectedly (because of the Supreme Court allowance to tax) has an exciting new opportunity to bring CLASS back from the grave as was Lazarus (John 11:44). Chief Justice Roberts said in his ruling on the health care law:

The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax.... Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.

So, the government can force Americans to buy anything by simply characterizing the forced payment as a "tax." This would give the Obama administration and Secretary Sebelius the authority to transmigrate the CLASS Act and tax citizens into paying for expensive premiums to support CLASS. It would no longer be voluntary. If the President is reelected, such an enormously costly move is surely possible. It has the regulatory glow that exhilarates Secretary Sebelius and drives our spendthrift President. CLASS is dead, and Republicans want to get it off the books completely. But Obama won’t repeal it.